PETALING JAYA: Khazanah Nasional is said to be looking to divest its stake in Westports Holdings Bhd, a move that resonates with its policy to reduce stakes in companies that are deemed as non-strategic in its portfolio of investments.
Sources said the state investment arm was looking at placing out its entire 4.74% shareholding in Westports to other funds through a book building exercise.
Although the funds were not identified, Westports’ current shareholders include AIA Bhd, Hwang Investment Management Bhd and Genesis Group.
Other big-name government-linked funds in Westports are Kumpulan Wang Persaraan, Employees Provident Fund, Skim Amanah Bumiputera, Lembaga Tabung Haji and Permodalan Nasional Bhd.
“(Khazanah) may sell some or all of its shares. For them, Westports is not exactly a strategic asset as their stake in the company is rather small,” a source said.
The source added that Khazanah could be divesting because its investment in the port operator had “matured”, as the share price has risen above the initial public offering (IPO) price of RM2.50.
Westports’ closing price of RM2.90 on Friday denotes a 16% gain since its IPO. A sell-off of Khazanah’s entire 4.74% stake would make RM64.65mil based on that.
Another source said Khazanah could retain some shareholding for future divestment.
“Khazanah may be seeking higher returns from other assets,” the source said, “But it doesn’t need to sell out of Westports to do that because Westports is still an attractive yield play.”
The stock offers decent dividend yields of 4%.
In July, RHB Research’s notes on Westports’ financial year 2014 first half performance said the company’s near-term share price catalyst was the impending tariff hike though the impact on earnings might be less than earlier thought.
“We expect the company’s throughput levels to easily meet our projection, which is deemed conservative,” the report said.
The management is also expected to firm up its future port expansion at the CT8 terminal by the last quarter of this year.
Khazanah is the third largest shareholder in Westports, with its 4.74% stake held indirectly through Lankayan Ventures Sdn Bhd.
When the port operator listed on Oct 18 last year, Lankayan Ventures sold down its stake from 7.52% to 4.74%. Although the transacted price was not made public, this meant that Khazanah had already cashed out some gains a year ago.
Upon that exercise, Khazanah ceased to be a substantial shareholder.
Westports’ largest shareholders are Pembinaan Redzai Sdn Bhd with a 42.39% stake and South Port Invest Holdings Ltd with 23.55%.
Pembinaan Redzai is majority held by Tan Sri G. Gnanalingam while South Port is a unit of Hong Kong tycoon Li Ka-shing’s ports-to-telecoms conglomerate Hutchison Whampoa.
Other notable shareholders include Semakin Ajaib Sdn Bhd which includes Gnanalingam’s wife Puan Sri Siew Yong and his son Ruben.
Prior to Westports’ IPO, Khazanah and Semakin reportedly owned 8.5% each in the company.